DealerLAB: People problems continue with losses in March

Publish Date: 
May 20, 2014
By Joe Delmont

PUNTA GORDA, Fla. -- Last month, we discussed the importance of having the right people to execute your systems and processes. In this report, we see that people problem continued at the Destination Powersports dealership owned by Bill Shenk.

In March, the dealership lost $12,290 on total revenues of $472,480, down sharply from earnings of $32,209 on total revenues of $616,201 for March 2013. Total unit sales declined month over month, from 58 units last year to 47 units this year.

For owner Bill Shenk, the reason for the drop in earnings this year is simple: People. People. People.

“Our lack of revenues is not because the phone isn’t ringing,” Shenk said. “It’s not because we don’t have enough good customers stopping by. And it’s not because our marketplace isn’t large enough.

“We have all those things, and we’ve had them most of the time, this year, but we’re just not converting these leads into sales. We have the proven systems to do that, and we have the proven process to do it. But we just have not had the people doing the job. That was most obvious in March when we lost almost $13,000, and we were down 27.8 percent in total revenues.”

TOUGH THREE MONTHS

Shenk parted ways with the sales manager in January, and in the last week of February Shenk brought in a sales manager who had experience at another multiline dealership. That hire didn’t work out, and sales started to suffer within a month, he said. Once again, Shenk sought a replacement.

Shenk brought in a new finance manager the first week of April, and he installed his current finance manager as sales manager in mid-April. Hopefully, he said, these moves will solve the problem.

In January, the service manager took a job in the auto industry. A few weeks later, the senior service writer left to join a family business. “Our parts manager tried his best to hold service and parts together till we could find a new service manager,” Shenk said, “but that has really hurt PAC production.” A new service manager started in mid-April.

The parts manager did a pretty good job managing all the PG&A and service business in March. Total revenues for parts, accessories and service this year were $91,983, down less than 1 percent from $92,880 last March.

Continued